Category: Personal Finance

Two of the most common questions asked of people who travel full time are: “How much does it cost?” and “How do you earn an income while traveling?”. I’ll share my spending details in this quarterly series of posts. This may help you estimate how much you’d spend living a similar lifestyle. In other future posts, I’ll share more about how I saved and invested in order to create (what I hope will be) enough lifelong income to fund all my spending.

I want to show you that a lifestyle like mine – full of travel, adventures, living in beautiful places, meeting fascinating people, and pursuing hobbies that aren’t exactly inexpensive – can be had for quite little money.

First, some clarifications

I will share a spending update at the end of each quarter.

I track and include every single dollar of spending. These updates are not just the money I spend on travel or my van, it is every dollar I spend.

I’ll share the total of how much I spent, and details of what I spent the money on. I’ll differentiate between spending on what I’ll call “essentials” and “extras”. If you’re thinking about how much you’d need to spend for a certain lifestyle, it’s likely my “essential” spending amounts will be more useful than the “extras”. The lists below show what I include in each category. As you’ll see, there are grey areas, and a lot of what’s in the essentials category is not truly essential. But for the sake on simplicity, this is how I’m categorizing them.

When I sell some hobby equipment, I count it here as negative spending

I have a more or less fixed income of around $1,600 per month. I spent a decade being a good cog in a large manufacturing machine. I invested much of my income and those investments are now the source of my ongoing income. So far, the $1,600 per month seems like more than enough to fund my lifestyle. I also earn some extra money on top of this from hobbies. I’m motivated to spend less than my income, but I’m not trying to spend as little as possible. Many other travelers are in different situations. Some work full time and need a way to find enough income to cover their spending. Some who travel have saved up some money and are spending that cash. Once they run out of money, they’ll go back to work. These last folks have much more motivation to spend as little as possible because it means traveling longer. My income will continue no matter what I’m doing, so I don’t have those reasons to reduce my spending as low as possible. Other people who travel or live in a vehicle full time have told me they spend only $200 per month.

One of the reasons I’m sharing my spending is to help dispel a common misconception people are indoctrinated with from childhood: that spending money makes you happy. For the most part, there is little connection between spending money and happiness or joy. Recent data currently shows that happiness increases as income increases, but only up to $75,000/year, and then it doesn’t really make a difference. Consider for a moment that this data comes from a population indoctrinated that more money means more fun. Much of the money I’m spending is not to “buy happiness”. It’s mostly just to exist as I do. My happiness and joy come primarily from the perspective from which I view things, and secondarily from how much I’m learning/growing and how many fun things I’m doing. Much of my spending on “extras” is to buy things that I will use and many many times. It’s not trading money for one-time happiness or entertainment. It is important to break yourself of the common misconception that spending money = entertainment/happiness. I don’t mean to say that spending money on experiences is wrong for absolutely everyone, but I do think many people spend money this way indiscriminately. I’ll surely rant on this in later posts.

Spending Update – 2017 Q3

For Q3 of 2017, my average monthly spending was $1,237. That is a higher than I’d like, but not so bad considering the extra things I did. I spent an average of $517 per month on essentials, and $720on extras.

(If I was really trying to spend little, I would’ve averaged under $500/month in total spending)

In September, I had the trip to Toronto and the tattoo, on which I spent $800 total. I also bought a new camera, sold my ‘old’ one, and bought some new lenses (well, most of them are used and really old actually). The camera changes all netted out to spending $450. I’m enjoying the new camera. It’s not as good technically as my old one, but I like shooting with it more, and now I have a MUCH wider array of lens lengths, so I can shoot a wider variety of things.

Gas was a little high in September because I drove a lot. I went from southwest Utah out to Los Angeles. Then up to Santa Barbara a couple times, and to various places in LA to buy old lenses.

All that tattoo and camera stuff made my hobby spending the highest category year-to-date. This is, more-or-less, the way I want it (low total spending, but with hobbies at a significant portion of it). I would like to have lower hobby and total spending over the next ~6 months, and I expect to do so… probably. I might buy another fairly expensive lens.

Here’s a look at how my spending has evolved since starting full-time travel in the van:

(Those big hobby spikes are when I bought new cameras, and the tattoo)

Spending Vs. Income

The chart below shows how much I spent each month (the red bars) compared to how much income I had (the green bars) and a running total showing the surplus/deficit (the area). This chart starts when I started traveling full time in the van.

My income ticked up a bit in Q3, and that’s mostly because of some investment changes I made and wrote about in Q2. YAY!

Here’s the same chart, but starting the surplus/deficit from scratch at the start of the year:

(These spending vs income charts ignore the tax refund I got this year. I’m not counting that because it’s related to my full-time employment last year and won’t happen again in the future)

My YTD savings rate is 40%, not counting the tax refund, and 50% including it. (For those not familiar with what this means, it means that I’ve spent only 60% of my income, so the unspent 40% will be reinvested, which will increase my future income a little bit).

Q4 Outlook

I will buy health insurance for next year, and with subsidies, that should cost around (only) $500. I think I’ll also pay for 6 months of van insurance. So the fixed costs will bump up.

I might buy another camera lens, and it would be an expensive one ($750). I may also buy some equipment that I’d use in Mexico (snorkeling gear, fishing gear).

So, Q4 will probably be about as high as Q3.

If I go into Mexico for the winter, as I hope, I expect my spending will be quite low while there. But I’ll probably spend less on hobbies while there. That’s really the only way for Mexico to be cheaper for me since don’t spend much on everything else. The only thing that I expect to cost less is food. Gas is about the same there, and I’ll probably drive quite a bit (Baja is 800 miles long). Lower spending would be mainly a result of me not buying more gear for hobbies – which is likely, as I think shipping stuff there would be more complicated.

Two of the most common questions asked of people who travel full time are: “How much does it cost?” and “How do you earn an income while traveling?”. In this post, I’ll share my spending details for the first three months of 2017. I’ll continue these updates each quarter. This may help you estimate how much you’d spend living a similar lifestyle. In other future posts, I’ll share more details of how I saved and invested in order to create (what I hope will be) enough lifelong income to fund all my spending.

I want to show you that a lifestyle like mine – full of travel, adventures, living in beautiful places, meeting fascinating new people, and even pursuing hobbies that aren’t exactly inexpensive – can be had for quite little money.

First, some clarifications

I will share a spending update at the end of each quarter.

I track and include every single dollar of spending. These updates are not just the money I spend on travel or my van, it is every dollar I spend.

I’ll share the total of how much I spent, and details of what I spent the money on. I’ll differentiate between spending on what I’ll call “essentials” and “extras”. If you’re thinking about how much you’d need to spend for a certain lifestyle, it’s likely my “essential” spending amounts will be more useful than the “extras”. The lists below show what I include in each category. As you’ll see, there are grey areas, and a lot of what’s in the essentials category is not truly essential. But for the sake on simplicity, this is how I’m categorizing them.

When I sell some hobby equipment, I count it here as negative spending

I have a more or less fixed income of around $1,500 per month. I spent a decade being a good cog in a large manufacturing machine. I invested much of my income and those investments are now the source of my ongoing income. So far, the $1,500 per month seems like more than enough to fund my lifestyle. I’m motivated to spend less than that, but I don’t much desire to spend as little as possible. Many other travelers are in different situations. Some work full time and need a way to find enough income to cover their spending. Some who travel have saved up some money and are spending that cash. Once they run out of money, they’ll go back to work. These last folks have much more motivation to spend as little as possible because it means traveling longer. My income will continue no matter what I’m doing, so I don’t have those reasons to reduce my spending as low as possible. Other people who travel or live in a vehicle full time have told me they spend only $200 per month.

One of the reasons I’m sharing my spending is to help dispel a common misconception people are indoctrinated with from childhood: that spending money makes you happy. For the most part, there is little connection between spending money and happiness or joy. Recent data currently shows that happiness increases as income increases, but only up to $75,000/year, and then it doesn’t really make a difference. Consider for a moment that this data comes from a population indoctrinated that more money means more fun. Much of the money I’m spending is not to “buy happiness”. It’s mostly just to exist as I do. My happiness and joy come primarily from the perspective from which I view things, and secondarily from how much I’m learning/growing and how many fun things I’m doing. Much of my spending on “extras” is to buy things that I will use and many many times. It’s not trading money for one-time happiness or entertainment. It is important to break yourself of the common misconception that spending money = entertainment/happiness. I don’t mean to say that spending money on experiences is wrong for absolutely everyone, but I do think many people spend money this way indiscriminately. I’ll surely rant on this in later posts.

Spending Update – 2017 Q2

For Q1 of 2017, my average monthly spending was $895. This is a little higher than I’d like, but not bad. I spent an average of $813 per month on essentials, and $82 on extras.

My “essentials” spending was higher than normal in June. I paid for 6 months of van insurance ($186), and bought a bunch of new clothes ($376). That clothes spending would fit better in “Extras”, but I’ll just stick to the categories as I set them up.

Spending Vs. Income

The chart below shows how much I spent each month (the red bars) compared to how much income I had (the green bars) and a running total showing the surplus/deficit (the area). This chart starts when I started traveling full time in the van.

Here’s the same chart, but starting the surplus/deficit from scratch at the start of the year:

I’ve saved and will reinvest 40% of my income so far this year. Nearly all the income came from investments. YAYY! I also got a tax refund, because I worked the first half of last year. With that, I’ve saved nearly 60%. While not even working.

Investment changes. More income!

The vast majority of my income is from dividends. I didn’t like my old employer’s 401k investment options, so after retiring, I converted my 401k money to a Traditional IRA. In that IRA, I put the money into a handful of Vanguard funds that pay decent dividends. I’m not a big fan of them, because the dividends vary and seem a bit unpredictable. The yields also aren’t all that great.

In June, I converted some of my Traditional IRA money from VYM (a well-diversified fund of large companies paying moderate dividends) to some REITS: OHI, WPC, and SBRA. These pay much higher dividends.

In my Roth IRA, I had money that I converted from Traditional to Roth earlier this year, plus some more from dividends within the Roth. I bought O (Realty Income Inc.) with that money.

These changes resulted in a $1,900 per year increase in dividend income. I’ll probably convert more of the Vanguard funds into individual stocks over time.

Two of the most common questions asked of people who travel full time are: “How much does it cost?” and “How do you earn an income while traveling?”. In this post, I’ll share my spending details for the first three months of 2017. I’ll continue these updates each quarter. This may help you estimate how much you’d spend living a similar lifestyle. In other future posts, I’ll share more details of how I saved and invested in order to create (what I hope will be) enough lifelong income to fund all my spending.

I want to show you that a lifestyle like mine – full of travel, adventures, living in beautiful places, meeting fascinating new people, and even pursuing hobbies that aren’t exactly inexpensive – can be had for quite little money.

First, some clarifications:

I will share a spending update at the end of each quarter.

I track and include every single dollar of spending. These updates are not just the money I spend on travel or my van, it is every dollar I spend.

I’ll share the total of how much I spent, and details of what I spent the money on. I’ll differentiate between spending on what I’ll call “essentials” and “extras”. If you’re thinking about how much you’d need to spend for a certain lifestyle, it’s likely my “essential” spending amounts will be more useful than the “extras”. The lists below show what I include in each category. As you’ll see, there are grey areas, and a lot of what’s in the essentials category is not truly essential. But for the sake on simplicity, this is how I’m categorizing them.

When I sell some hobby equipment, I count it here as negative spending

I have a more or less fixed income of around $1,500 per month. I spent a decade being a good cog in a large manufacturing machine. I invested much of my income and those investments are now the source of my ongoing income. So far, the $1,500 per month seems like more than enough to fund my lifestyle. I’m motivated to spend less than that, but I don’t much desire to spend as little as possible. Many other travelers are in different situations. Some work full time and need a way to find enough income to cover their spending. Some who travel have saved up some money and are spending that cash. Once they run out of money, they’ll go back to work. These last folks have much more motivation to spend as little as possible because it means traveling longer. My income will continue no matter what I’m doing, so I don’t have those reasons to reduce my spending as low as possible. Other people who travel or live in a vehicle full time have told me they spend only $200 per month.

One of the reasons I’m sharing my spending is to help dispel a common misconception people are indoctrinated with from childhood: that spending money makes you happy. For the most part, there is little connection between spending money and happiness or joy. Recent data currently shows that happiness increases as income increases, but only up to $75,000/year, and then it doesn’t really make a difference. Consider for a moment that this data comes from a population indoctrinated that more money means more fun. Much of the money I’m spending is not to “buy happiness”. It’s mostly just to exist as I do. My happiness and joy come primarily from the perspective from which I view things, and secondarily from how much I’m learning/growing and how many fun things I’m doing. Much of my spending on “extras” is to buy things that I will use and many many times. It’s not trading money for one-time happiness or entertainment. It is important to break yourself of the common misconception that spending money = entertainment/happiness. I don’t mean to say that spending money on experiences is wrong for absolutely everyone, but I do think many people spend money this way indiscriminately. I’ll surely rant on this in later posts.

Spending Update – 2017 Q1

For Q1 of 2017, my average monthly spending was $670. This is right about where I like it.

I spent an average of $500 per month on essentials, and $165 on extras.

My “essentials” spending in Q1 was mostly food and gas, and the level of spending is about what I want and expect. My food spending feels pretty high, but I’m eating very well.

The “extras” spending in March included:

Some tea

Bike parts – tubeless tires and some parts for setting them up

Bike parts – a smaller inner chainring (I’ve been riding up some really steep forest service roads and have to walk sometimes)

I expect my ongoing spending to be close to what I spend over the last three months.

Spending Vs. Income

The chart below shows how much I spent each month (the red bars) compared to how much income I had (the green bars, with income shown as a running 3 month average to smooth it out), and a running total showing the surplus/deficit (the light red area, which goes negative).

In another month or two I will have gotten back to zero from the big camera purchases I made in October. That was a very uncommonly large purchase for me.

Like all types of numbers, the way this data looks depends a lot on what I select to show. I did my taxes in March and got a fairly big federal return. That money is not shown in the chart above because it’s really essentially just getting back my own 2016 income. It doesn’t apply to what I use the chart for.

If I start this chart at the beginning of the year, and include that tax money, I have a surplus of over $4,500 because I’ve spent only 30% of my income. YEAAH BUDDY! Got it made.

I’ve wanted to start earning some income from hobbies. As you can see, as long as I don’t spend a lot, that investment income easily covers all my spending. Months like January and February where I ended up with an extra $1,000 per month don’t motivate me to earn more income.

What about you?

Earlier today, I listened to the latest Mad Fientist podcast. His guest was a personal finance icon: Vicki Robin. She’s the author of “Your Money or Your Life“. If I had to recommend one single personal finance book to the wide population, this is it. In it, she helps you remove unhealthy views of money and spending (feelings of sacrifice, or guilt, or “I deserve it”). She teaches you how to properly quantify and analyze your money as your “life energy” (your time). Also, she shows you how to spend money more intentionally, in line with your personal values and with what brings you joy. She shows you how to take complete control of your spending. No more feelings of guilt or sacrifice.

Near the end of the podcast, the host asked Vicki “If you could share just one piece of advice for our audience, what would it be?”. Her answer was: track and review your spending.

Do you track your spending?

If you do: what do you get out of it? How much do you spend per month on average? Are you happy with that amount?

If you don’t track your spending: Why not? And, if this is you, stop whatever you would’ve done after reading this, and read Your Money or Your Life.

People often wonder how much full-time vandwellers spend. I’ll share my cost of vanlife over the first 6 months. My average monthly spending was $2,100. This is quite high for me, and much higher than I expect going forward. Control of ones finances is a critical skill in order to live the kind of life they want. I’ll be posting more on this blog about my spending, my income, and sharing some advice on how to move both of those in the directions you want, and most importantly, how to save your money (your life energy) and win your freedom.

Cost of Vanlife: my first 6 months of spending

I’ve read that it’s common for people to increase their spending for a while after retiring – particularly those who launch right into long term travel. Well, me too. I’ve been a naughty boy. The chart below shows how much I spent each month (the red bars) compared to how much income I had (the green bars, with income shown as a running 3 month average to smooth it out), and a running total showing the surplus/deficit I have (the light red area, which goes negative).

It’s not all that bad. I bought some expensive camera gear in October. I spent more than usual on gas in August and September. I spent more than usual on health insurance in September and December. If all goes as planned, my spending will be quite low in 2017.

Here are some more details on my spending:

Some of what’s in the “Essentials” category was not actually essential – like using a lot of gas. But to keep it simple I didn’t try to separate ‘extra gas’ from ‘normal/essential gas’.

The camera spending was a huge bump. If I hadn’t bought that, my average monthly spend would’ve been about $1,100.

The fixed costs were high in September and December from paying health insurance premiums. In September I paid for the rest of 2016, and those were expensive because my income in the first half of the year prevented me from getting subsidies. In December, I paid premiums for all of 2017. I (expect to) get a lot of subsidy because of my low income. Thanks Obama.

Looking forward, I expect lower spending on hobbies, gas, and fixed costs. I’m hoping to spent $500-$1000 in many months. Maybe even below $500 a few months.